Lemonade Reports Q2 2025 Earnings: IFP Growth Accelerates to 29% YoY, Targets $1.218B Year-End, Expands in Europe and Car Insurance.

Lemonade reported a 29% YoY increase in in-force premium (IFP) for the seventh consecutive quarter, with a gross loss ratio of 67%. The company is targeting a year-end IFP of $1.218B and is expanding into Europe and the car insurance market.

Title: Lemonade Reports Strong Q2 Performance with 29% YoY IFP Growth and Expansion into Europe

Lemonade Insurance (LMND) reported a strong second quarter (Q2) 2025, with a notable 29% year-over-year (YoY) increase in in-force premiums (IFP) [1]. The company's IFP reached $1.08 billion as of June 30, 2025, up from $838.8 million in the same period last year. This growth is the seventh consecutive quarter of IFP acceleration, reflecting Lemonade's robust performance and expansion strategies.

Key financial highlights include a 35% increase in revenue to $164.1 million, driven by higher gross earned premiums, ceding commission income, and net investment income [1]. Gross profit doubled year-over-year to $64.3 million, with an adjusted gross profit of $65.6 million, representing a 96% increase from the prior year [1].

Customer count grew by 24% to 2.69 million, while premium per customer increased 4% to $402. The company's trailing twelve-month gross loss ratio improved by three points to 70%, within its target range [1]. The second-quarter gross loss ratio was 67%, down 12 points from a year earlier.

Lemonade also announced significant changes in its reinsurance strategy, reducing its cession rate from roughly 55% to 20% beginning July 1, 2025. This move reflects stronger underwriting performance and improving margins [1]. Additionally, the company's auto segment has shown growth, with cross-selling to existing customers more than doubling year-over-year, aided by telematics-driven pricing [1].

Expansion into Europe has been a key driver of Lemonade's growth. The company's European operations, active in Germany, France, the UK, and the Netherlands, served more than 250,000 renters and homeowners as of the quarter end. IFP in the region grew over 200% year-over-year to $43 million, contributing to the company's overall growth [1].

Looking ahead, Lemonade expects IFP at September 30, 2025, to be between $1.144 billion and $1.147 billion, with gross earned premiums between $267 million and $269 million. For full year 2025, IFP at December 31 is anticipated to be between $1.213 billion and $1.218 billion [2]. The company also expects Q3 growth spend at $47 million, with the full-year total near $173 million.

References
[1] https://www.insurancebusinessmag.com/us/news/breaking-news/lemonade-reports-35-revenue-rise-in-q2-545026.aspx
[2] https://seekingalpha.com/news/4478954-lemonade-outlines-quota-share-reduction-and-targets-1_218b-year-end-ifp-while-expanding